50.: ricardo to malthus1[Answered by 51] - David Ricardo, The Works and Correspondence of David Ricardo, Vol. 6 Letters 1810-1815 
The Works and Correspondence of David Ricardo, ed. Piero Sraffa with the Collaboration of M.H. Dobb (Indianapolis: Liberty Fund, 2005). Vol. 6 Letters 1810-1815.
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First published by Cambridge University Press in 1951. Copyright 1951, 1952, 1955, 1973 by the Royal Economic Society. This edition of The Works and Correspondence of David Ricardo is published by Liberty Fund, Inc., under license from the Royal Economic Society.
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ricardo to malthus
[Answered by 51]
London 26 June 1814
My dear Sir
I yesterday received your letter dated from Bangor, and was very glad to learn that you had had a pleasant journey, and had taken up your abode in a beautiful situation. I hope you may meet with as few obstructions to your comfort as in any case fall to the lot of travellers.
I do not recollect the precise spot of the Penryn Arms, I think I was at an Inn close to the water side.—I suppose it is your intention to make Bangor your head quarters, and not Carnarvon, as you projected when you left London.— I expect that your eye will be quite weary of the bare mountains of Wales and you will hail with pleasure the more fruitful country of England.
Another year I hope I shall better understand your wishes respecting yr. taking a share in the Loan. In making the sale for you which I have done I have by no means prevented you from having an interest in the success of the Omm. during the year, for I can without the least trouble repurchase your £1000; and if the price do not vary before I hear from you, at a profit of 1¼ pct., it being now only 3¾ pm.—
If you are so inclined you will write accordingly. If I do not hear from you I shall not do any thing.
I cannot partake of your doubts respecting the effects of restrictions on the importation of corn, in tending to lower the rate of interest. The rise of the price or rather the value of corn without any augmentation of capital must necessarily diminish the demand for other things even if the prices of those commodities did not rise with the price of corn, which they would (tho’ slowly) certainly do. With the same Capital there would be less production, and less demand. Demand has no other limits but the want of power of paying for the commodities demanded. Every thing which tends to diminish production tends to diminish this power. The rate of profits and of interest must depend on the proportion of production to the consumption necessary to such production,—this again essentially depends upon the cheapness of provisions, which is after all, whatever intervals we may be willing to allow, the great regulator of the wages of labour.
Nothing can tend more effectually to diminish the demand abroad for our manufactures than to refuse to import corn and all other commodities which we had usually taken in exchange for such manufactures. If we rigorously refused to import any foreign commodity whatever I firmly believe that we should soon cease to export any commodity, even if we made gold an exception to the general rule. Our money would stand at a higher level than in other countries but there are limits beyond which it could not go. All trade is at last a trade of barter and no nation will long buy unless it can also sell,—nor will it long sell if it will not also buy. If by adopting such policy a country were to enhance the value of the raw materials which it consumed, of which corn is the principal, it would thereby lower the rate of interest. If otherwise it might be deprived of many luxuries and many comforts, or might enjoy them in less abundance, but the rate of interest would not fall.
This is a repetition you will say of the old story, and I might have spared you the trouble of reading at 200 miles distance what I had so often stated to you as my opinion before, but you have set me off, and must now abide the consequences.
I never was more convinced of any proposition in Polit: Economy than that restrictions on importation of corn in an importing country have a tendency to lower profits. Remember me kindly to Mrs. Malthus
Yrs. very truly